What drove the market?

Investors pored over earnings reports released early Tuesday, with Bank of America Corp. BAC, +1.51%following on the lead of Goldman Sachs Group Inc.
GS, +0.54%
and Citigroup Inc.
C, +0.77%
, issuing earnings that failed to surpass analysts’ low expectations in the first quarter.

Dow component UnitedHealth Group Inc. UNH, +0.46%
initially rose after it beat revenue and profit expectations for the first quarter while boosting its full-year outlook. But the stock quickly surrendered those gains on concerns over threats that new health-care reform measures, like “Medicare for All,” could significantly hurt health-insurance industry profits. The stock fell 4%.

Last Friday, presidential hopeful Sen. Bernie Sanders of Vermont called out UnitedHealthcare, a $180 billion division of UnitedHealth, CEO Steve Nelson by name in a tweet that linked to a Washington Post story on insurers working to pull Democrats away from Medicare for All.

Our message to Steve Nelson and UnitedHealthcare is simple: When we are in the White House your greed is going to end. We will end the disgrace of millions of people being denied health care while a single company earns $226 billion and its CEO makes $7.5 million in compensation. https://t.co/OafOIT92H9

Analysts have penciled in a year-over-year decline in S&P 500 corporate profits for the first quarter, which would mark the first fall in three years.

Industrial production fell 0.1% in March, below the 0.1% rise expected by economists surveyed by MarketWatch. The same report showed capacity utilization falling to 78.8% in March, the lowest since last July, and below expectations of 79.1%

Home-builder sentiment rose to a six-month high in April, according to the National Association of Home Builders’ monthly confidence index, which rose to 63, up from 62 in March.

What did analysts say?

“The market is completely focused on earnings,” said Eric Kuby, chief investment officer for North Star Investment Management. “Companies really lowered their guidance coming into earnings season, and we’re getting to the point where companies are doing a good job of stepping over that lowered bar.”

“The tone of [UnitedHealth Group’s] outlook, and particularly the political overhang, is preventing them from rallying on good past performance,” he added.

“Of the 10 companies that have reported earnings this morning, nine have exceeded earnings-per -share forecasts and one reported results that were in line with expectations,” said Paul Hickey of Bespoke Investment Group, in a note to clients.

“While the revenue beat rate this morning hasn’t been nearly as strong (60%), it hasn’t been bad either,” he added. “Those positive results coupled with a big rally in Asia overnight has…the S&P 500 on pace for a new year-to-date high with all-time highs not too far away.”

What stocks were in focus?

Johnson & Johnson JNJ, +0.01%
rose 1.1% after the consumer and health-care product company topped Wall Street expectations for revenue and earnings in the first quarter.

Shares of AT&T Inc.T, +0.40%
edged up 0.7% after the telecommunications giant said late Monday that it had sold its minority stake in Hulu back to the streaming-video joint venture. The deal valued Hulu at $15 billion, with AT&T’s 9.5% interest valued at $1.43 billion.

Shares of Expedia Group Inc.
EXPE, -0.45%
gained 0.4% after the company said that it has entered into an agreement to acquire Liberty Expedia Holdings Inc.
LEXEA, -0.53%
in an all-stock deal.

Qualcomm Inc.QCOM, -3.00%
shares soared 23% on news that it reached a deal with Apple Inc.AAPL, -0.38%
to drop all lawsuits, with Apple paying an undisclosed sum in the settlement. Apple shares were mostly flat.

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